Directors to run risk management committees in banks

Banks will have to constitute a risk management committee compromising a maximum of five members from the board of directors, according to a Bangladesh Bank circular issued on 27 October 2013.
The circular has been issued in line with Banking Companies Act (Amendment) 2013.
As per the previous law, banks had to form two committees — audit and executive — to run a bank properly. For the first time, the amended law has included terms of reference for the executive committee.
“The risk management committee has to ensure that a bank has taken every measure to handle risks, be it operational, money laundering, internal control or foreign currency transaction,??? said the circular.
The tenure of the committee will be three years, it said.
In another circular, BB has specified the job of a chief executive officer of a bank. A banker has to have at least 15 years of experience to become the CEO of a bank and the age limit has been set at 65 years.
The third circular was on the appointment of consultants and advisers to a bank.
A bank has to take permission from the central bank to appoint a consultant or adviser, whose age must not be more than 65 years.
Bangladesh’s banking industry was run by the Banking Companies Act 1991, which has recently been amended.